Weekly Market Outlook | 9 – 13 February 2026

Global financial markets concluded the first week of February with a significant divergence between “old economy” resilience and high-growth volatility. While the Dow Jones Industrial Average hit the historic 50,000 milestone, the tech-heavy Nasdaq and broader S&P 500 faced pressure as investors digested a “Magnificent Seven” earnings season that rewarded high CapEx but punished anything less than perfection. Precious metals experienced a violent recalibration, with gold and silver plunging late in the week as markets repriced U.S. terminal rate expectations following the nomination of Kevin Warsh as the next Fed Chair. Market sentiment was further clouded by a partial U.S. government shutdown, which forced the postponement of the January Non-Farm Payrolls (NFP) report. This lack of official data amplified the impact of the Challenger Job Cuts report, which showed layoffs surging over 200% month-on-month—the highest January total since 2009—raising urgent questions about the cooling labor market despite the Dow’s record-breaking run.

Key Points to Watch

• The “Double Header” Macro Week: With the NFP rescheduled for mid-week and CPI on Friday, the “soft landing” narrative faces its most significant stress test of 2026.
• Big Tech Post-Earnings hangover: Market focus shifts from earnings results to how rising Treasury yields and massive AI infrastructure spending will impact valuations in a “higher-for-longer” leadership regime.
• Japanese Political Clarity: Prime Minister Sanae Takaichi’s landslide election victory has triggered a massive repricing of “Sanaenomics,” impacting the Nikkei-Yen correlation.
• European Growth Divergence: Preliminary Q4 GDP data from the UK and Eurozone will reveal if the continent can escape stagnant growth while central banks maintain a cautious easing bias.
• Energy and Metal Stabilization: Following the recent sell-off in precious metals, support levels are being tested as geopolitical premiums compete with a strengthening U.S. dollar.

United States: The Data Triple-Whammy

The coming days represent a high-stakes “triple-whammy” for U.S. asset classes. Following the shutdown-induced delays, the market will now face a condensed schedule featuring Retail Sales on Tuesday, the rescheduled NFP on Wednesday, and CPI inflation on Friday. Investors are looking for a “Goldilocks” print; however, the recent Challenger data suggests the labor market may be cracking faster than the Fed anticipated. Meanwhile, the earnings season continues with the focus shifting to consumer staples and industrial heavyweights (e.g., Coca-Cola, Cisco). Any upside surprise in CPI, combined with a sticky labor market, could send the 10-year Treasury yield toward new highs, acting as “kryptonite” for the recently battered software and AI sectors.

UK and Europe: GDP Prints in a Cautious Environment

Across the Atlantic, the narrative is dominated by the fallout from the recent central bank meetings. The Bank of England maintained rates at 3.75% in a tight 5-4 vote, signaling that while the easing cycle remains intact, the pace is far from guaranteed. Attention now pivots to the preliminary Q4 GDP releases for both the UK and the Eurozone. In an environment where manufacturing PMIs remain subdued, a weak GDP print would heighten recessionary fears and increase the pressure on the ECB and BoE to accelerate rate cuts, potentially weighing on the Euro and Sterling against a resurgent Dollar.

Asia: Takaichi’s Mandate and the “Sanae-Rally”

Asia-Pacific markets are currently the epicenter of global equity momentum following Sanae Takaichi’s decisive snap election victory in Japan. The Nikkei 225 surged over 5% to record highs above 57,000 as traders priced in a period of fiscal expansion and continued monetary accommodation—a policy mix dubbed “Sanaenomics.” However, this has come at the cost of Yen weakness, with USD/JPY testing again the 157.50 level. Investors are watching closely to see if the Bank of Japan will be forced to intervene or if the fiscal-driven equity rally can sustain its momentum without triggering a disruptive bond market sell-off.

Commodities: Gold’s Retreat and Energy Surplus

Commodities markets have been dominated by an extreme reversal in precious metals, where gold and silver’s parabolic rally to record highs was followed by the steepest corrections since the 1980s as expectations for a more hawkish Fed chair nomination triggered a rapid unwind. Gold saw a peak-to-trough drawdown on the order of the high-teens in percentage terms, while silver’s higher beta translated into a drop in excess of one-third from its peak, amplified by higher margin requirements and forced deleveraging. Despite this, gold ended the week roughly flat as dip-buyers emerged, suggesting investor demand for hedges against policy uncertainty and geopolitical risk remains intact. Energy markets, meanwhile, continue to price a non-trivial geopolitical premium, even as mixed growth signals temper the demand outlook; this keeps oil an important upside risk for inflation expectations and central-bank reaction functions into Q2. 

Global Themes and Conclusion

The overarching theme for 2026 has become one of polarization: between the AI-driven tech elite and the broader “old economy” sectors, and between a resilient U.S. economy and a struggling Europe. Policy divergence is at its peak, particularly as Japan pursues fiscal expansion while the U.S. navigates a leadership transition at the Federal Reserve.

Conclusion

 Markets enter the second week of February with liquidity fully restored but conviction fragile. The lack of official U.S. labor data has created a vacuum filled by anecdotal evidence of job cuts, making the upcoming NFP and CPI releases critical for directional bias. In this high-volatility environment, we favor selective exposure to defensive industrials and “Sanaenomics” beneficiaries while remaining cautious on high-multiple tech until the inflation trajectory is cleared.